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May 28, 2013 at 08:00 PM
Where will the next jolt of growth come for ETFs? Look no further than actively managed funds.
A new research report published by SEI, titled “Getting a Grasp on Actively Managed ETFs Before the Boom,” says the low cost, transparency, and tax efficiency of ETFs make them an attractive choice for investors.
While actively managed ETFs currently make up less than 1% of the global ETF market, SEI predicts active funds will be a major contributor to the next phase of ETF expansion, ultimately competing with traditional active mutual funds for market share.
“Recently there has been positive movement supporting growth in active ETFs, but the historical roadblocks and lengthy SEC approval process have steered both managers and investors away,” said Jay Cipriano, head of traditional solutions for SEI’s investment manager services division.
In April, the Securities and Exchange Commission granted exemptive relief to Exchange Traded Concepts. The move may shorten the time line for new active ETFs to be introduced—a process that typically can take up to 18 months from registration to launch.
